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Urea prices rise and fall, and there is a high expectation of demand in the market in the later stage

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At the beginning of this week, supported by the Indian Standard's announcement, the market had strong positive expectations for urea. However, under the impact of export restrictions and port backflow, the market's selling sentiment also increased. However, as the weekend approached, the international situation became more complex, and futures prices began to rise steadily on Friday afternoon. Market demand began to follow up, and the wait-and-see sentiment eased. Through the fermentation of time, During the weekend, the prices of urea in some mainstream regions fluctuated. Currently, the mainstream factory price of urea in Shandong is 2410-2500 yuan (ton price, the same below), and the composite fertilizer enterprises in Linyi area receive urea at a price of 2430 yuan; The mainstream factory quotation for urea in Hebei region is 2450-2470 yuan; The mainstream factory quotation for urea in Henan region is 2460-2480 yuan; The mainstream factory quotation for urea in Shanxi region is 2350 yuan, while the price for large particles is 2510 yuan. However, in places such as Jiangsu, urea prices are still continuously declining. With the rapid rise and fall of urea, downstream purchasing sentiment is being suppressed, and wait-and-see concerns about the price continuing to rise. However, when entering the market, there are concerns about being trapped, and the market is unclear. The factors affecting the later trend of urea are as follows:

Firstly, can the reduction be fulfilled as scheduled. With the recent production of some large factories and new units, the daily physical production of urea in China has increased to over 180000 tons, which exceeds the daily production without legal inspection and export in previous years. The overall supply pressure is relatively high. With the decrease of temperature, topics such as limited production and natural gas reduction in Jincheng, Shanxi have entered the industry's field of vision. Recently, some urea units in Jincheng have entered a state of shutdown, and there are still plans for device rotation and maintenance in the future, The gas head urea company stated that in November? There is also an expectation of limited production in the future, and there is a possibility of a decrease in supply in the future. However, it remains to be seen whether the expected reduction can be achieved as scheduled, and even with the planned reduction, the overall production in the future can still be maintained at around 160000 tons. There is still some bearish outlook on whether the urea market, which still requires legal inspection at this stage, can provide too much support.

Secondly, when will the demand side follow up in large quantities. After entering November, the national commercial light storage and downstream industrial composite fertilizer raw material procurement will also gradually expand. Due to long-term bearish expectations for the high price level of urea in the industry, but due to factors such as storage tasks and high demand, procurement cannot all be carried out at the lowest point. Downstream enterprises need to consider shipping time, their own storage progress, and industrial consumption while considering price levels, And once additional factors are injected (such as a slight rebound in urea this time), it will also affect the progress of procurement. In addition, the long-term low social inventory has poor resilience. Although urea prices in some regions are relatively weak, according to this year's situation, once demand enters the price level, it will quickly enter a rebound.

In summary, the recent rise and fall in urea prices have led to high demand expectations in the market, which is also one of the main reasons for the industry to continue to pay attention to the trend of urea. However, the recent international situation has become increasingly complex, and it is estimated that there is a possibility of further tightening of export inspection or inventory in the future. Although there are bearish expectations, downstream inventory is at a low level for a long time, and there should be no possibility of long-term continuous decline in urea trend. If there is a high demand expectation, Follow up appropriately when the price is low.

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